** Deflated by personal consumption expenditures (PCE) index for all items, except health, which is deflated by PCE medical index. NIPA data are for the entire economy; ECEC data are for the private sector.

Source: Authors' analysis of Bureau of Labor Statistics National Compensation Survey employment cost trends and benefits data, Bureau of Economic Analysis National Income and Product Accounts, and Pierce (2010)

Updated May 14, 2012

Documentation and methodology

The data in the top panel are computed from the Bureau of Economic Analysis National Income and Product Accounts (NIPA) tables. “Wages and salaries” are calculated by dividing wage and salary accruals (NIPA Table 6.3) by hours worked by full-time and part-time employees (NIPA Table 6.9). “Total compensation” is the sum of wages and salaries and benefits (it includes payroll taxes and health, pension, and other nonwage benefits). Payroll taxes are calculated as total compensation (NIPA Table 6.2) minus the sum of volunteer benefits (sum of health and nonhealth benefits; see NIPA Table 6.11) and wages and salaries. “Benefits” is the difference between total compensation and wages and salaries. These data were deflated using the NIPA personal consumption expenditure (PCE, chain-weighted) index, with health insurance adjusted by the PCE medical care (chained) index. These data include both public- and private-sector workers.

The data in the Employer Costs for Employee Compensation (ECEC) panel come from the BLS National Compensation Survey’s employment cost trends and benefits data and provide cost levels for March for private-sector workers, available starting in 1987. We categorize wages and salaries differently than BLS, putting all wage-related items (including paid leave and supplemental pay) into the hourly wage/salary column. This makes the definition of wages and salaries comparable to workers’ W-2 earnings and to the definition of wages in the CPS Outgoing Rotation Group (ORG) data that are tabulated for other tables in this chapter. Benefits, in our definition, include only payroll taxes, pensions, insurance, and “other” benefits. The sum of wages and salaries and benefits makes up total compensation. It is important to use the ECEC (the current-weighted series) rather than the other series from the same National Compensation Survey (NCS) data, the ECI (the fixed-weighted series), because composition shifts (in the distribution of employment across occupations and industries) can have large effects over time. Employer costs for insurance are deflated by the medical-care component of the CPI-U-RS (Consumer Price Index Research Series Using Current Methods). All other pay is deflated by the CPI-U-RS for “all items.” Inflation is measured for the first quarter of each year. Wage and compensation inequality measures are drawn from Pierce (2010). Pierce computes these from the NCS microdata, the data used to calculate the ECI and ECEC data.